Earnings call transcript: Mobix Labs sees strong Q1 FY2025 revenue growth

MOBIX LABS, INC (MOBX), a $49 million market cap technology company, reported a notable performance in Q1 FY2025, showcasing significant revenue growth and improved operational metrics. Despite the absence of specific earnings forecasts, the company achieved a sequential revenue increase of 7.3% and an impressive 11-fold growth compared to the same quarter last year. The stock price remained stable in aftermarket trading, closing at $1.35, unchanged from its previous close. According to InvestingPro analysis, the stock is currently trading below its Fair Value, suggesting potential upside opportunity.

Key Takeaways

• Mobix Labs reported Q1 FY2025 revenue of $3.17 million, marking an 11x increase year-over-year.
• The company improved its adjusted operating loss by 28.9%, reducing it to $2.5 million.
• Strategic acquisitions and product innovations are driving growth in aerospace and defense markets.
• The company is withholding near-term revenue guidance due to ongoing acquisition strategies.

Company Performance

MOBIX LABS, INC demonstrated robust growth in Q1 FY2025, with revenues reaching $3.17 million, a substantial increase compared to the same period last year. This growth aligns with the company’s strategic focus on the aerospace, defense, and wireless technology markets. Mobix Labs continues to leverage its expertise in high-reliability interconnect solutions, positioning itself strongly against industry competitors.

Financial Highlights

• Revenue: $3.17 million, 7.3% sequential increase, 11x growth year-over-year.
• Adjusted gross margin: 54.1%.
• Adjusted operating loss: Improved by 28.9% to $2.5 million.
• Cash balance: Increased to $405,000 from $266,000 in the previous quarter.

Outlook & Guidance

Mobix Labs is withholding near-term revenue guidance, citing its ongoing acquisition strategy. However, the company aims for long-term financial objectives, targeting a gross margin of 60% and an adjusted operating margin of 30%. The strategic focus remains on expanding its presence in high-growth markets through acquisitions and innovative product developments.

Executive Commentary

CEO Fabian Battaglia emphasized the company’s commitment to solving real-world customer problems through strategic acquisitions and innovations. He stated, "Our expertise in interconnect and wireless solutions, coupled with our disciplined approach to strategic acquisitions, positions us as a formidable player in rapidly growing markets."

CFO Kevan Simini reiterated the company’s financial goals, saying, "We remain committed to achieving a gross margin of 60% and an adjusted operating margin of 30%."

Risks and Challenges

• Supply chain disruptions could impact production timelines and costs.
• Market saturation in key sectors may limit growth opportunities.
• Macroeconomic pressures, such as inflation and interest rate changes, could affect financial performance.
• Integration risks associated with planned acquisitions may pose operational challenges.

Mobix Labs’ strategic initiatives and strong financial performance in Q1 FY2025 highlight its potential for continued growth. However, the company must navigate potential risks to sustain its upward trajectory.

Full transcript - MOBIX LABS, INC (MOBX) Q1 2025:

Lisa, Investor Relations, Mobic Labs: Good afternoon, everyone. I’m Lisa, Investor Relations for Mobic Labs. And I’d like to thank you for joining us as we report Mobic’s fiscal fourth quarter and full year twenty twenty four financial results for the period ending 12/31/2024. Joining me on today’s call are Fabian Battaglia, Chief Executive Officer and Kevan Simini, President and Chief Financial Officer. This call is also being webcast live in the Investor Relations section of our website at mobixlabs.com.

Before we begin, I’d like to remind everyone of our Safe Harbor policy. This call and webcast contain forward looking statements as defined under the Private Securities Litigation Reform Act of 1995, which are subject to risks and uncertainties. Any statements regarding expectations, projections or other characterizations of further events, including financial outlooks, market conditions or product developments are considered forward looking statements. Actual results may differ materially from those expressed due to various factors, including those outlined in our SEC filings. MobX Lab assumes no obligation to update any forward looking statements except as required by law.

For more detailed discussion of risks and uncertainties, please refer to our SEC filings, including our Form 10 Q for the quarter ending 02/12/2025, and the Risk Factors section of our Form S-one filed on 08/12/2024. Additionally, this call includes non GAAP financial measures. Reconciliations of these measures to the most directly comparable GAAP financial metrics are available in our fourth quarter earnings release, which is posted in the Investor Relations section of our website. With that, I’d like to turn the call over to Fabian Battaglia. Fabian, please go ahead.

Fabian Battaglia, Chief Executive Officer, Mobic Labs: Good afternoon, everyone. I’m excited to welcome you to MOBICS Labs fiscal year twenty twenty five first quarter earnings call for the period ending December 2024. As we now enter our second full year as a public company, I’m thrilled to share our progress and the opportunities we see ahead. Mobix Labs continues executing on a bold vision, leveraging technology innovation, strategic acquisitions and operational excellence to drive sustained growth. In fiscal Q1 twenty twenty five, we delivered revenue of $3,170,000 exceeding our prior guidance and marking our fifth consecutive quarter of growth.

This momentum reflects the strength of the successful integration of Rade Systems and EMI interconnect solutions and the expanding demand for our technology and solutions across key industries. Continuing our strategic expansion, Mobix Labs has agreed to acquire two high value companies, Spacecraft Components Corp and SCP Manufacturing. These acquisitions, which are expected to close within the next few months, will strengthen our position in the aerospace and defense markets. Spacecraft Components, a well established Nevada based leader in precision aerospace and defense technology, has long been a trusted supplier to Mobix Labs’ subsidiaries as well as many other customers. Integrating their expertise and long standing customer relationships will position us for even greater success.

SCP Manufacturing, which specializes in mission critical electronic components used exclusively in spacecraft components products plays a key role in supporting vital defense systems, including the U. S. Army’s Patriot missile platform and major metropolitan transit networks. These acquisitions are expected to enhance our operational efficiency, gross margins and overall profitability as we create new synergies across our expanding portfolio. Our EMI interconnect solutions products line remains a high growth engine for the company.

The mid-twenty twenty four launch of our filtered A ring connectors set a new industry standard and demands for this product continues to grow. In Q1 twenty twenty five, we secured bookings for these high performance connectors now being integrated into next generation aircraft electronics. Additionally, our customer designed filtered connectors are now actively deployed in the U. S. Army’s Apache helicopters, enhancing communication reliability in mission critical environments.

We’re also delivering our hard performance USB connectors for use in the U. S. Army’s Chinook helicopters ensuring seamless data transmission in even the most extreme conditions. These successes reinforce Mobix Labs as a premier provider of high reliability interconnect solutions for military and commercial aerospace applications. On the wireless technology front, the RAGE Systems product group continues to be a powerful growth driver.

I am pleased to announce that RAGE Systems has been awarded a Phase one SBIR grant from the U. S. Department of Defense. This funding supports pioneering collaboration with the University of Massachusetts at Lowell to develop a low power, high performance monolithic software defined system on chip for satellite communications. This project underscores our commitment to technological leadership and our role in strengthening national defense capabilities.

In addition, demand for millimeter wave imaging and security detection products remains robust. We are producing and advancing multiple generations of our imaging modules, opening doors to new markets, including critical infrastructure protection. Our non visual imaging and multi sensor fusion technologies are expected to generate transportation infrastructure fault detection revenue opportunities throughout 2025 and beyond. Our partnership with Talking Heads Wireless is also beginning to yield results. As we help to integrate AI driven, power efficient radio architectures, we are laying the foundation for revolutionary advancements in base station technology, significantly reducing power consumption and improving network efficiency.

Meanwhile, our research collaboration with the University of Massachusetts at Lowell continues to generate groundbreaking innovations. Our state of the art lab on campus is driving advancements in infrastructure imaging for the rail industry and exploring next generation solutions for low power, high performance satellite communications. As we scale operations and integrate our acquisitions, we remain focused on meeting growing customer demand by optimizing production capacity to accelerate deliveries. With our planned strategic investments in technology, talent and infrastructure, we are confident in our ability to drive sustained growth and maximize shareholder value. At Mobix Labs, we are not just building a company.

We are solving real world customer problems. Our expertise in interconnect and wireless solutions coupled with our disciplined approach to strategic acquisitions positions us as a formidable player in rapidly growing markets. As we look ahead, we are poised to capitalize on significant opportunities, drive innovation and create long term value for our shareholders. Now Kevan will tell you a bit more about our financial results.

Kevan Simini, President and Chief Financial Officer, Mobic Labs: Thank you, Fabian. I’m thrilled to share the financial highlights of our first fiscal quarter ending 12/31/2025. Unless otherwise stated, all figures discussed today are on a non GAAP basis. Now let’s dive into our results for the first quarter of twenty twenty five. We delivered revenues of $3,170,000 exceeding the high end of our guidance and marking a strong 7.3 sequential increase over the prior quarter.

Our revenue skyrocketed 11 fold compared to the same fiscal quarter last year, underscoring our exceptional growth trajectory. Turning to gross margin, our first fiscal quarter adjusted gross margin remained relatively stable at 54.1% compared to 56.6 in the prior quarter, reflecting continued price discipline and cost efficiencies. We also made meaningful strides in improving profitability. Adjusted loss from operations improved by an impressive 28.9%, narrowing to $2,500,000 from $3,600,000 in Q4. Notably, this marks the fourth consecutive quarter of reduced operating losses, a testament to our disciplined cost management and focus on scalable revenue growth.

Our balance sheet continues to strengthen with cash growing to $405,000 at the end of Q1, a significant increase from 266,000 in the prior quarter. To capitalize on strategic acquisitions and rising customer demand, we are actively pursuing additional financing that will position us to execute on growth opportunities and scale our business to meet customer demand. Looking ahead at our second fiscal quarter of twenty twenty five, we acknowledge the substantial near term variability associated with our acquisition strategy and sales cycles. Given this, we believe it is in the best interest of our stakeholders to withhold revenue guidance at this time. However, long term financial objectives remain firmly in place.

We remain committed to achieving gross margin of 60% and an adjusted operating margin of 30%. As revenue scales, we will continue exercising disciplined cost management to drive operational leverage and advance toward profitability. In summary, we are highly encouraged by our performance in the December. Our acquisition strategy is fueling the revenue expansion we set out to achieve. With a growing pipeline of M and A opportunities, rising customer demand and ongoing operational enhancements, Mobix Labs is on a clear path towards scalable growth and long term success.

Operator, we are now ready to take questions.

Lisa, Investor Relations, Mobic Labs: Thank you. At this time, I’m not showing any questions in the queue. I would like to thank you for joining today’s conference call. You may all disconnect.

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